How Important is it for Your Company to Provide Investors With Forward Guidance?

REIT magazine: May/June 2018

Ed Fritsch, President & CEO, Highwoods Properties (NYSE: HIW)

"Providing FFO, same property growth, occupancy and other financial and capital allocation metrics facilitates an ongoing conversation between management and our investors throughout the year.  As we make refinements to our annual outlook it fosters an open and thoughtful dialogue with our constituents.  The feedback from investors is they appreciate the consistency with which we forecast and refine operating and investment expectations as it gives them substantial insight into management’s outlook.”

Julian Whitehurst, President & CEO, National Retail Properties (NYSE: NNN)

"Annual guidance frames what we think are reasonable expectations for our short-term, or one year, performance.  Shared expectations are good, and guidance may temper overly optimistic, or overly dour, outlooks by some.  It places expectations on management to achieve.  It provides additional detail and transparency into our philosophy and goals.  It gives investors more data and insight as to where the company is headed.

The alternative of not providing guidance may leave investors wondering a bit and potentially gives management more license to skate with softer performance.  Annual guidance does not take the place of communicating long-term, or five plus years’ objectives—which frankly is more important.”

A. William Stein, CEO, Digital Realty (NYSE: DLR)

"Forward guidance serves a useful purpose.  It gives us an opportunity to share a sense for our near-term earnings growth prospects with the investment community and allows us to set public guardrails to help keep investor and analyst expectations within a reasonable range.  It’s easier said than done, but the key is to rise above the quarterly earnings drumbeat and remain focused on managing the business to maximize long-term value creation for all stakeholders.”

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